In 2008, South Africa experienced a severe electricity crisis. Domestic and industrial electricity users hadto suffer from black outs all over the country. It is argued that partially the reason was the lack of researchon energy, locally. However, Eskom argues that the lack of capacity can only be solved by building newpower plants.The objective of this study is to specify the variables that explain the electricity demand in South Africaand to forecast electricity demand by creating a model using the Engle–Granger methodology for co-integrationand Error Correction models. By producing reliable results, this study will make a significant contributionthat will improve the status quo of energy research in South Africa.The findings indicate that there is a long run relationship between electricity consumption and price aswell as economic growth/income. The last few years in South Africa, price elasticity was rarely taken intoaccount because of the low and decreasing prices in the past. The short-run dynamics of the system areaffected by population growth, tooAfter the energy crisis, Eskom, the national electricity supplier, is in search for substantial funding inorder to build new power plants that will help with the envisaged lack of capacity that the companyexperienced. By using two scenarios for the future of growth, this study shows that the electricitydemand will drop substantially due to the price policies agreed – until now – by Eskom and the NationalEnergy Regulator South Africa (NERSA) that will affect the demand for some years.
展开▼
